Saving-investment balance

In economics, saving-investment balance or I-S balance is a balance of national savings and national investment, which is equal to current account. This relationship is obtained from the national income identity.

Description
This is the national income identity:
 * $$Y=C+I+G+(EX-IM)$$

where
 * Y: GDP,
 * C: national consumption,
 * I: national investment,
 * G: government spending,
 * EX: export,
 * IM: import,
 * EX－IM: current account.

The national income identity can be rewritten as following:
 * $$(Y-T-C)+(T-G)-I=EX-IM$$

where T is defined as tax. (Y-T-C) is savings of private sector and (T-G) is savings of government. Here, we define S as National savings (= savings of private sector + savings of government) and rewrite the identity as following:
 * $$S-I=EX-IM$$

This identity implies that the difference of national savings and national investment is equal to current account.